Input Credit on ST paid on GTA Service

[Paresh Jain]

Dear Members,

I have a client who is registered under the service category of GTA service in the capacity of service recipient.  Just wanted to clarify that he has no other output service.

I just wanted to know, whether he can get the credit of service tax paid on GTA service against the next months service tax liability.

AI Summary

Cenvat Credit on GTA services restricted; reverse charge tax requires cash payment, not credit by recipient.
Notification 12/2008 exempted 75% of freight for GTA, leaving 25% taxable and led to deletion of GTA from output services for CENVAT purposes, withdrawing automatic credit. A service recipient may claim Cenvat Credit on GTA as an input service where attributable, but credit generally cannot be utilised to pay the GTA reverse charge tax, which is required to be discharged in cash; some judgments have permitted contrary treatment, while inbound freight credit is generally accepted and outbound freight credit remains disputed.